Buying your first investment property involves preparation, market research, securing financing, and ongoing management.
Key steps include setting clear goals, assembling a team of professionals, and conducting thorough due diligence to ensure financial viability.
Buy-and-Hold – An investment strategy where you purchase a property and hold it long-term to generate rental income and potential appreciation.
Cash Flow – The net income from a rental property after all expenses, including mortgage, taxes, insurance, and maintenance, are paid. Positive cash flow means the property earns more than it costs to own.
Conventional Loan – A mortgage not insured or guaranteed by the federal government, often offered by banks and credit unions with specific credit and down payment requirements.
Due Diligence – The process of thoroughly reviewing a property before purchase, including inspections, verifying income and expenses, checking title, and understanding local regulations.
Down Payment – The upfront cash paid when purchasing a property, typically a percentage of the purchase price (commonly 20–30% for investment properties).
Financing Pre-Approval – A lender’s conditional agreement on the amount you can borrow, based on your financial situation, credit, and income.
House Hacking – A strategy where you live in one unit of a multi-unit property and rent out the other units to offset living expenses.
Investment Property – Real estate purchased with the intention of generating income or appreciation rather than primary residence use.
Property Management – The oversight of rental properties, including tenant relations, maintenance, rent collection, and compliance with landlord-tenant laws.
Turn-Key Property – A property ready to rent immediately, requiring little to no repairs or renovations.
Vacancy Rate – The percentage of time a rental property is unoccupied, which affects potential rental income.
Operating Expenses – The costs associated with managing and maintaining a rental property, including mortgage, taxes, insurance, utilities, maintenance, and property management fees.
Real Estate Agent (Investment Specialist) – A licensed professional who helps buyers locate, evaluate, and purchase investment properties.
Rental Income – The income received from tenants for occupying a rental property.
Market Research – Analyzing property values, rental rates, demographics, and local trends to make informed investment decisions.
Investor Mindset – A mindset focused on long-term financial goals, risk management, and understanding the responsibilities of property ownership.
